Balancer Labs, the corporate entity behind the decentralized finance (DeFi) protocol Balancer, is set to close its operations. This decision comes in the wake of a significant security breach that occurred in November 2025, resulting in the loss of approximately $110 million in digital assets, including osETH, WETH, and wstETH.
Co-founder Fernando Martinelli announced the closure, stating that the corporate structure had become a liability rather than a benefit to the protocol’s future. In a forum post, Martinelli explained that the entity lacked sustainable revenue sources, prompting the decision to wind down operations.
Despite considering a total shutdown of the protocol, Martinelli opted against it, citing ongoing revenue generation as a reason to restructure rather than completely dissolve the project. Balancer was once a prominent player in the DeFi landscape, with a total value locked (TVL) of nearly $3.5 billion at its peak in late 2021. However, current data indicates a dramatic decline, with the TVL now at approximately $157 million, representing a 95% decrease.
The market capitalization of the protocol has also diminished significantly, now sitting at around $10 million, with the BAL token trading at $0.16, far below its net asset value. Over the past three months, Balancer has generated more than $1 million in annualized fees, which, while insufficient for its current operational model, could support a leaner approach.
The proposed restructuring plan aims to eliminate BAL emissions entirely, which Martinelli described as a costly “circular bribe economy.” Additionally, the governance model, known as veBAL, will be dismantled to address concerns over unrepresentative voting influenced by external protocols.
Under the new plan, the decentralized autonomous organization (DAO) treasury would capture 100% of protocol revenue, a significant increase from the current 17.5%. The share for the v3 protocol would be reduced to 25% to attract more organic liquidity. A buyback of BAL tokens is also planned to provide liquidity for holders wishing to exit.
Martinelli emphasized the importance of transparency in the restructuring process, stating, “If you believe in the restructured Balancer, you stay. If you don’t, you get a fair exit.” Key members of the Balancer Labs team will transition to a new entity, Balancer OpCo, pending governance approval. Martinelli will step back from formal involvement but has offered to serve as an advisor.
The focus of the protocol will narrow to five key areas: reCLAMM pools, liquidity bootstrapping pools, stablecoin and liquid staking token pools, weighted pools, and expansion into non-EVM chains, with all other initiatives being discontinued.
As of the latest reports, the BAL token was trading at $0.72, reflecting an 88% decline from its all-time high.
Balancer Labs will cease operations following a major exploit that drained $110 million in assets. Co-founder Fernando Martinelli announced a restructuring plan aimed at sustaining the protocol while addressing financial liabilities.